YEREVAN, November 17. /ARKA/. The 2020 budget deficit will grow to 7.1% instead of the 2.3% projected at the beginning of the year, Chairman of the Central Bank of Armenia Martin Galstyan said in parliament on Tuesday.

He said the economic development in 2020 was driven by the coronavirus crisis, economic constraints and  the growing uncertainty due to the  martial law.

According to him, both supply and demand contributed to the deep economic downturn, resulting in a decrease in private spending.

"However, the expansionary policy was expressed in an increase in the deficit and public debt. At the beginning of the year, the budget deficit was expected at 2.3%, due to the coronavirus it was revised and, according to September data, was expected at 6.1%, but according to the current forecast for the year we expect it at 7.1%, which is due to both an increase in government spending in the context of war in Karabakh  and a decrease in tax revenues as a result of a slowdown in economic activity," Galstyan said.

As for macroeconomic estimates, he said the GDP growth  for 2021 is projected at 3.2%, which from the point of view of supply will be expressed by growth in all spheres of the economy.

"It is expected that gross demand compared to 2020 will show recovery trends, due to the growth of both domestic consuming and investment spending," Galstyan said.

The draft state budget for 2021 calls for 1 trillion 569.06 billion drams in revenue and 1 trillion 843.1 billion drams in spending. The projected budget deficit is f 274 billion drams (4.1% of GDP). Economic growth is foreseen at 4.8%, and inflation is set at 4% (± 1.5%). ($1 - 497.14 drams). –0--